Equity Projection Calculator
See how your home equity evolves over time with a reverse mortgage. Adjust the appreciation rate to model different scenarios.
What these numbers mean.
What this calculator shows
How home value, loan balance, and remaining equity may evolve over time.
What does this mean? In a positive appreciation scenario (for example 4-6% annual growth), many homeowners still see meaningful equity growth even while the reverse mortgage balance compounds.
How to Read the Equity Projection
The chart shows three lines: your home value over time, your loan balance as interest compounds, and the remaining equity (home value minus loan balance). The remaining equity is what you or your estate would receive after repaying the reverse mortgage.
The role of home appreciation
Canadian home values have historically appreciated at 4–6% annually in major urban markets, though this varies significantly by location and market cycle. The projection lets you model conservative (2%), moderate (4%), and optimistic (6%) appreciation scenarios. Even at 2% appreciation, most Canadian homeowners retain significant equity over a 20-year horizon because they only borrow 15–55% of their home value.
Semi-annual compounding
The federal Interest Act requires lenders to disclose a yearly or semi-annual not-in-advance equivalent rate. That is a disclosure rule — it does not require the loan balance to compound only twice a year. Calculators on this site model the common semi-annual equivalent used to quote Canadian reverse mortgage rates. Semi-annual compounding results in a slightly lower effective interest rate than monthly compounding at the same nominal rate.
The no-negative-equity guarantee
All four regulated Canadian reverse mortgage lenders offer a no-negative-equity guarantee. Even in a declining market where the loan balance exceeds your home value, you (or your estate) will never owe more than the home is worth at the time of sale. The lender absorbs any shortfall.
What does this mean for your family?
Concerned about what your heirs will inherit? Our detailed estate impact analysis shows projections for 5, 10, 15, and 20 years. For a family-focused perspective, see how a reverse mortgage affects inheritance. To compare rates that affect how fast the balance grows, review the four reverse mortgage lenders plus Fraction.
These projections are estimates only. Actual home appreciation varies by location and market conditions. Interest is calculated using semi-annual compounding (A = P(1 + r/2)^(2t)) as the disclosed Interest Act equivalent. CHIP, Equitable, Bloom, and Home Trust include a no-negative-equity guarantee; Fraction does not. Consult a licensed mortgage broker for personalized advice.
Frequently Asked Questions
Will I still have equity left after 20 years with a reverse mortgage?
In most scenarios yes — because you only borrow 15–55% of your home value upfront and home appreciation offsets compounding. At 4% appreciation, a 65-year-old borrowing 35% often still retains 40–60% equity after 20 years. At 2% appreciation, equity declines faster but the no-negative-equity guarantee ensures you never owe more than the home is worth at sale. Use the calculator to model your age, amount, and rate.
How does the no-negative-equity guarantee work in the projection?
CHIP, Equitable Bank, Bloom, and Home Trust all include No Negative Equity Guarantee (NNEG): you or your estate never repay more than the fair market value at sale, even if the compounded balance exceeds it. The lender absorbs the shortfall. Fraction does not include NNEG. The projection flags scenarios where the balance approaches home value so you can see NNEG's value.
What appreciation rate should I use?
Canadian urban markets have historically appreciated 4–6% annually, but location and cycle matter. Model 2% as conservative, 4% as moderate, and 6% as optimistic. The calculator compounds appreciation at A = P(1 + g)^t and debt at the Interest Act semi-annual equivalent, matching how Canadian reverse mortgage rates are quoted.
Want help with these numbers?
Book a free call and we'll walk through your results and compare lenders for your situation.